Authorities To Prosecute Foreign Businessman

Authorities To Prosecute Foreign Businessman

Authorities To Prosecute Foreign Businessman

Jul. 20, 1996

HANOI, Vietnam (AP) _ Authorities have decided to press tax evasion charges against one of the best-known foreign businessmen in Vietnam, the director of Peregrine Capital Vietnam Ltd., and his wife.

The decision, announced today comes seven weeks after Ho Chi Minh City officials appeared at Peregrine's office and demanded company documents.

The case has sent chills through the foreign investor community because many business people say Vietnam's rules are unclear and unevenly enforced, encouraging risk-taking that can backfire.

Nguyen Duy Dung, chief of investigation at the Ho Chi Minh City prosecutor's office, said he signed a decision Thursday to press charges against Nguyen Trung Truc and Deidre Low.

The initial charge is evading taxes while importing 80 cars, but other charges may be added, Dung said in a telephone interview.

Other officials have raised questions about a possible relationship between Peregrine and 13 local companies involved in importing and distributing consumer goods.

Peregrine's license allows it to engage only in financial and investment consulting, and no foreign companies are allowed to distribute goods inside Vietnam, according to the Ministry of Planning and Investment.

Truc, a Vietnamese-born Australian, was one of the first businessmen to jump into the Vietnam market in the early 1990s, when the government had just begun liberalizing its Soviet-style planned economic system. His flamboyant style and rapid success in setting up auto and computer dealerships brought him into the spotlight, and he was frequently profiled by international business publications as a Vietnam success story.

Truc, who has previously denied any wrongdoing, did not return telephone calls made to his office and home in Ho Chi Minh City. A woman who answered the office telephone identified herself as his wife, refused to comment and hung up. She and Peregrine staff said Truc was in a meeting.

Peregrine Capital Vietnam, founded in 1991, is 60-percent owned by Hong Kong-based Peregrine Investments Holdings and 40-percent by Truc, his wife and a Singapore businessman.

Dung said Truc and his wife would not be arrested but would have to seek permission to leave the city pending a trial. Another investigator, Le Cong Hoa, said the couple cannot leave Vietnam.

Hoa said his office will take at least four months to prepare its case before a trial can be held.